Blog

Adjusting to the Subscription Economy

Companies everywhere are looking for ways to transition from traditional billing methods to subscription and recurring billing models that are based on consumption. We know this from our experience and in “The Forrester Wave: Recurring Customer and Billing Management, Q3 2017” (published July 31, 2017), it is reported that 29 percent of those global decision-makers who are prioritizing making a business model change plan to adopt a recurring revenue-based business model in the next 12 months.

This week, I read “How the Nascent Subscription Economy Impacts Traditional Partners” about how companies are challenged in the transition from traditional billing to recurring billing models. The article points out, “Accounting standards for subscription-based models are vastly more complex and at times seemingly completely arbitrary, and we can expect them to become even more so next year when the new Accounting Standards Codification 606 takes effect. Under the new standard, software solutions packages that combine added offerings like maintenance, security, implementation services, and customer support will have to be broken apart into individual transactions. In many cases, these supplemental offerings don’t have set individual prices, which means that any values assigned to them will pretty much just be guesses.”

To comply, it is essential to have (or change to) a billing system with capabilities for the necessary breakdown that is required by the impending ASC 606. We can help. For example, we’ve worked with one of our technology partners, OnApp, with 3,500 cloud provider customers worldwide. Ditlev Bredahl, CEO of OnApp, said: “With its enterprise-grade billing and customer management capabilities, Ubersmith is a popular choice for telcos and MSPs who build their clouds with OnApp. We’re looking forward to expanding our relationship with Ubersmith, and helping MSPs and telcos deliver the new subscription-based models that will drive their growth in cloud, CDN, and other services.”

The Ubersmith software suite of usage-based billing fits organizations of all sizes, is used by hundreds of companies around the world and integrates with merchant providers, electronic payment processing providers, cloud, virtualization, backup and other technologies and applications. Implementations can be customized to fit specific needs making Ubersmith an ideal way to transition into consumption-based billing.